Dear Editor:
As the Town of Hinton heads into the final round of decision-making for the budget, an unexpected surplus of about $1.0 million has appeared since Council’s last discussions on this topic. And with it the question of how you want this surplus spent. Would you like the money used to reduce your taxes by about 2.2% or should council add it to spending, meaning a 3.7% tax increase? Council seems to be leaning toward spending it. But what do you think?
This $1.0 million surplus comes mostly from an increase in $600,000 from Yellowhead County (changes to the linear assessment formula), a $300,000 savings from operating costs to the Rowan Recycle Station and a number of other changes. And it could generate a fund of roughly $800,0000 which council has tentatively discussed spending in a roughly equal three-way split between (i) older asset repairs, (ii) a mill rate stabilization fund and (iii) a recreation centre fund.
Before deciding, please remember that as a taxpayer and homeowner under existing Hinton water treatment plans you are already facing an approximately $ 2.8 million per year increase to your utility fees, the equivalent of about a 20% tax increase. At least, that’s my calculation.
During the budget discussion the Mayor challenged it, referring to “Councillor Taylor’s make-believe math”. And since we don’t want fake or even just mistaken numbers to drive important financial decisions, I want to share with you how I got to these figures.
Calculating the taxes payable in any given year involves a three-step process:
- Council sets the budget they need based on a series of detailed discussions, and comprehensive supporting information is assessed at budget time. For Hinton this process was completed on December 11, 2024 and resulted in Council determining that a tax allotment of $14,602,441 was required. This number represented a 4.9% increase from the previous year as I trust the Mayor agrees.
- At a later date residential and non-residential property assessments are completed by a certified tax assessor. In this case the assessments for houses in Hinton increased by 3.3% for residential properties and 3.8% for non-residential. Again I do not think the Mayor challenges that calculation.
- Finally, a bylaw tax rate is determined as a mathematical result of the numbers generated by those first two steps. If the assessment increases and the bylaw tax rate doesn’t change the tax burden rises. To hold the burden steady in the face of assessment increases, Council must decrease the tax rate. I didn’t make that part up either.
Often, as part of step three new information comes to light that Council or administration wasn’t previously aware of. Which is what happened here with the $1 million surplus. But it just plugs into those familiar calculations, in this case reducing the needed tax allotment from $14,620,441 to $13,620,637. And if the Mayor is still with me to this point, it’s straightforward to work out that the latter number represents a 2.2% tax decrease from the $13,919,680 in net municipal taxes collected in 2024.
This year a number of Councillors have apparently decided instead to set the tax bylaw rate change at 0%. But if we do, then with assessments up 3.7% the total amount of tax collected at the unchanged rate will necessarily go up by 3.7%, generating a fund of $800,000 above our earlier budget calculations, which council then spent a lot of time discussing how to spend rather than whether to.
Politicians are good at presenting what are in fact tax increases in some other more appealing light. In this case a Tax Bylaw rate increase of 0% sounds a lot better at election time than the actual 3.7% increase you may have to pay.
If you think I bungled the math let me know where I went wrong. But if not, there’s a real rather than make-believe decision whether we go for a real tax decrease of 2.2%, or a real tax increase of 3.7% and, if we choose the latter, how you’d like it to be spent.
As always, let me know your thoughts because we’re your Council and it’s your money.
Stuart Taylor, Member of Hinton Council
